http://mconsultingprep.com/problem-solving-test/free-practice-mckinsey-pst/ Welcome you to our free practice case for the McKinsey Problem Solving Test, the best practice case beside those official practice cases from McKinsey. Please note the following before trying this case: Take this one serious, good practice Problem Solving Test cases are scarced Please time yourself: 20 minutes ( (60 mins / 26 question) * 9 questions) No calculation is allowed We suggest you to print out this case and do it on paper This Problem Solving Test is given free of charge, you are welcome to share it with whoever is interested Make sure you read carefully our guide on Problem Solving Test
- 1. 02014 MConsultingPrep, Inc.Updated on Aug 10, 2014
2. 1This practice test has been developed to provide a sample of the actual McKinsey Problem Solving Test used for selection purposes. This test assesses your ability to solve business problems using deductive, inductive, and quantitative reasoning. This practice case contains a total of 9 questions and should be completed in 20 minutes. The actual test contains 26 questions and you will be given 60 minutes to answer as many questions as possible.You will be presented with a scenarios based on an actual McKinsey client cases. Information related to each scenario will be shown in test, table, and exhibits. This information is presented in shaded areas and is distributed in sections throughout the scenario. The questions ask you to find the most appropriate answer to the problem as described using only the information presented. You should select on and only one answer to any question.While completing this practice case, do not use any electronic devices (e.g., calculator, computer) when preforming calculations to answer the questions. Electronic devices will not be permitted to be used during the actual test administration. Also during the actual test administration, you may use all blank space in the test booklet as scratch paper to assist you in performing any calculations and recording any notes. No scratch paper will be allowed. Booklets will be destroyed after you complete the test and will not be used in any way to determine your test scores. You final test score will be based on the number of questions you answer correctly.This practice scenario begins on the next page of this booklet. Only consider information contained within the scenario when determining your answer. Considering all information presented within the scenario is critical to answering questions correctly.After you have completed the test, score your answer using the answer key located at the end of this booklet. Add the number of correct answers to determine your final total score.Following your completion of this practice case, please take a minute and tell us your thought: https://docs.google.com/forms/d/1OQo6VSudJv- NgeU8I6o04fHIrxjzEmLNugK5XaP5UBA/viewform 3. 2TOYO Piano (TOYO) is a Japan-based company offering a full range of piano- related products and services. Since its establishment in 1934, the company has vastly expanded its business and presence. Nowadays, TOYO has stores and services centers in over 20 different countries in all 5 continents. TOYO has a reputation for superior customer and after-sales services.TOYO operates on three major business lines:New Piano Retailer: TOYO sells brand new pianos mainly of Japanese brands, with which it has great relationships with. This business line concentrates on developed countries like Japan, Korea, the United States, and Europe.Used Piano Refurbishing: TOYO buys back old pianos, typically 50 years old, from developed countries, refurbishes them, and sells to developing markets like South East Asian countries. TOYO possesses a large distribution network and the best-in-class refurbishment technology, which enable it to stay competitive with this business line.Piano Services: TOYO also provides Piano enhancement and maintenance services like painting, fixing, tuning, etc. to individuals and organizations. Despite having a premium brand image, TOYO faces increasing competition from various small local services providers.The recent worldwide economic downturn has been causing TOYO major damages as TOYO global revenue has vastly decreased for the last 3 years. The TOYO global Managing Director thinks that the problem does not lie in the economic recession but instead in TOYOs business model. He states that the giant-size model is no longer suitable with the highly dynamic business environment nowadays as it is slow in recognizing pitfalls and adapting changes. The recent recession is just a triggering event to the long-existing problem within TOYO.Table 1 shows TOYO Piano Worldwide Revenue in recent years.Table 1TOYO Piano Worldwide Revenue (in $US Millions)200720082009201020112012Revenue2,5492,7342,8122,7892,3951,923 4. 31. Which of the following statements best describes the concern of the TOYO managing director?A) The director is concerned that TOYOs global revenue has been decreasing and its big size does not allow TOYO to survive through the recessionB) The director is concerned that TOYOs business model is not suitable for the current recessionC) The director is concerned that the fast-changing business environment does not favor big and complex companies like TOYOD) The director is concerned that recessions will trigger problems existing within TOYOExhibit 1 shows breakdown of TOYO Worldwide revenue into its business lines. The data for business lines is presented as a percentage of TOYOs total revenue in each specific year.Exhibit 1TOYO Worldwide Revenue Breakdown by Business Lines 5. 42. Based on the data presented in Table 1 and Exhibit 1, which of the following statements is true?A) Revenue from Refurbishment has stayed relatively flat for the last 6 yearsB) Revenue from Services has increased since 2010C) The sales growth rate has been increasing in every year between 2007 and 2009D) The sales reduction rate has been increasing in every year between 2009 and 20123. Which of the following statements, if true, best explains why the Retail line sale is negatively impacted the most by the recession?A) TOYO has the best-in-class refurbishment technology, which enables it to maintain the competitive quality throughout the recessionB) Piano vendors cut their price charged to retailers in response to the recessionC) People tend to cut spending during a recession by switching to lower-cost instruments like guitars, keyboards, etc.D) People tend to cut spending during a recession by switching to lower-cost piano 6. 5In an effort to simplify the companys geographical structure, the team gathers data on various countries that TOYO has presence in to find out which market is dragging TOYOs overall profitability down. Exhibit 2 maps 10 countries under consideration onto a grid which illustrates TOYOs current profit margin, competition index, and TOYOs current revenue in each country in 2012. Competition index is a measurement of how intensive competition in a market is with a higher index indicating more intensive competition. TOYOs current revenue is represented by bubbles with bigger sizes indicating larger revenue.Exhibit 22012 TOYO Pianos Profit Margin, Competition Index, and Sales Size in the 10 MarketsUnder Consideration 7. 64. Which of the following is the accurate rank of profit contribution of particular countries from low to high based on the data in Exhibit 2?A) England, India, Australia, Japan, United StatesB) Vietnam, Japan, United States, Russia, ChinaC) Germany, Australia, Vietnam, Japan, ChinaD) Vietnam, Korea, Australia, India, England5. Which of the following statements, if true, would NOT help support an argument AGAINST exiting the India market?A) Many smaller competitors in India will not be able to survive through this recessionB) The detailed breakdown of India shows the major profitability issues lie in only the retails business lineC) Despite not being profitable, India is the major source of used piano for refurbished piano sold to other countriesD) A number of smaller competitors would be able to quickly adapt to changes in this business environment nowadays, specifically this recession 8. 76. Which of the following is a valid conclusion based on the above facts?A) TOYO total profit of the Refurbishment business line has been decreasing during the recessionB) TOYO average total cost of each piano sold has increased during the recessionC) TOYO average profit margin of pianos sold has decreased during the recessionD) TOYO is selling less pianos during the recessionHypothesizing that people tend to choose lower-cost pianos during the recession time, the team decides to study the impact on refurbishment profitability. The following facts have been gathered and confirmed:People, including TOYO customers, do choose cheaper refurbished piano during recessionsTransportation cost is the same for all refurbished piano and is relatively not affected by the recessionThe refurbishment cost varies by piano, but generally is proportionate with the purchasing cost of each pianoTo keep the premium brand image, TOYO has been keeping the selling price of each particular piano at the same level with before the recessionThe selling price varies by piano, but generally is proportionate with the purchasing cost of each piano 9. 8In an attempt to cut cost for after-sales services, the team gathers information regarding various support methods:Whenever there is a support request from a customer, TOYO gives the customer a diagnostic phone call. Sometimes the issue is resolved right away.Most of the time, a technician is sent to the customers home for physical support. If the technician is unable to resolve the issue, a more senior sound engineer is sent.In some occasions, a senior sound engineer is sent directly after the diagnostic call depending on the value of the piano and the complexity of the problemTOYO receives a total of approximately 1 million support requests worldwide every yearTable 2 represents cost and share of each support method..Table 2After-sales Services Methods Cost and Frequency in 2012Support MethodExplanationCost per try ($US)Percent of all requests using this method (percent)Call diagnosticEvery time a support request is received15c (100)TechnicianA junior specialist is sent to the customers home70t (60)Sound EngineerA more senior specialist is sent to the customers home100s (30) 10. 97. Which of the following figures is closest to the daily worldwide cost of after- sales support for TOYO Piano?A) $87 millionB) $15 millionC) $87 thousandD) $240 thousand8.